new fixed rate with current lender

the_boy_with_no_name

hi,


I currently have my mortgage with the skipton building society. this was taken out in april 2014 and the rate is currently 2.4% (2 year fixed).
this is due to expire at the end of march and the skipton have offered me a deal of 1.7% fixed for 2 years or a tracker at 1.54% above base rate (currently 2.04%), both of these have a fee of £995 that I can pay without adding to the mortgage.


I have had a look and you can get slightly better deals but with a larger fee and I would need to have valuations carried out.


my house cost £145,000 2 years ago, but skipton use the Halifax house price index tool and are putting a valuation of £176,000.
I have £110,000 outstanding this brings the ltov down to under 65% with the skipton, but if I change lender I run the risk of the house being valued at the £145,000 and the ltv being 75%.


I know no-one can give me financial advice, but does this sound like a good deal from skipton?


thanks

betmunch

I would like to know what the no fee options are from Skipton before making any decision.


If you're looking at a 2 year product with that balance I'm not convinced paying a £995 fee is in your best interest

the_boy_with_no_name

betmunch wrote: »

I would like to know what the no fee options are from Skipton before making any decision.


If you're looking at a 2 year product with that balance I'm not convinced paying a £995 fee is in your best interest

thanks for the reply.


the no-fee option is 2.06%

I'm also planning on trying to overpay the max amount over this term, don't know if makes a difference.

they also have a 5 year no-fee option at 2.69%


thanks again

betmunch

the_boy_with_no_name wrote: »

thanks for the reply.


the no-fee option is 2.06%

I'm also planning on trying to overpay the max amount over this term, don't know if makes a difference.

they also have a 5 year no-fee option at 2.69%


thanks again

I think you should think very carefully about what you will get for paying a fee, and if you're unsure of the figures take formal advice

the_boy_with_no_name

betmunch wrote: »

I think you should think very carefully about what you will get for paying a fee, and if you're unsure of the figures take formal advice

thanks for your help.


ive just looked at a couple of calculators and I think I'm better off not paying the fee and taking the slighter higher rate. the details are;
with fee:
cost over deal period including fee: 12558.46


without fee:
cost over deal period: 12017.55


so am I right in saying im 540.91 better off not paying a fee?

getmore4less

NO,

you have to look at the amount outstanding after 2 years as well.
easiest way is add the fees make the payments the same(with max overpayment if thats what you are doing) and see whats left after 2years.

Maximum_Saving

It is amazing that Skipton knows how much your house is worth now. I bought my bungalow for £160,000 in 2010 and Nationwide said it has gone up to £175,000. I would ask Skipton if they have any no fee mortgages. You seem to be taking a new mortgage every 2 years. If you keep on paying around £900 to £1000 for fees this will be a lot of money in your lifetime. You will be much better off if you don't pay a fee. Good luck.

My mortgage is now £24,300. I hope to pay it off on 1st September 2017.

the_boy_with_no_name

we only want to fix for 2 years as by that time my daughter will more than likely have her own place and we want to move to a bungalow.


im surprised that skipton have valued our house at 176K, but it helps with loan to value.


need to get my head around this.

the_boy_with_no_name

just to finish this off, after discussing our options with a financial advisor we have fixed with the Skipton (current lender) for 5 years at a rate of 2.74% with no fees.


there were other options on the market available, but after everything that would need to be paid we would not be any better off.

betmunch

What happened to the plan to move in 2 years?

the_boy_with_no_name

betmunch wrote: »

What happened to the plan to move in 2 years?

slight change of plan with regards moving as my daughter has been accepted for cabin crew training so she will be with us for a while longer.